The USD/CAD currency pair on Friday completed a downward breakout from a descending channel formation to trade at about 1.3379. The currency pair traded in a highly volatile trend during the week.

The pair has now plummeted to trade a few levels below the 100-hour moving average line in the 60-min chart. As a result, the currency pair plunged to the oversold levels of the 14-hour RSI.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in both markets. On Friday, Canadian retail sales for November outperformed the (MoM) expectation of -0.5% with a change of -0.1%. On the other hand, retail sales ex-autos fell by 0.6% compared to an increase of 1.6% in the previous period. Earlier in the week, the BoC’s core consumer price index for December missed the expected (YoY) change of 6.1% with a change of 5.4%. The (MoM) equivalent also missed the estimate of 01% with a change of -0.3%.

In the US, the Philadelphia Fed Manufacturing Survey for January beat the expected reading of -11 with a reading of -8.9. Housing starts for the period beat the estimate of 1.359 million with a higher tally of 1.382 million while building permits came short of 1.37 million with 1.33 million. Elsewhere, the initial jobless claims for the week ending January 13 outperformed the expected claim count of 214k with a lower tally of 190k. Earlier in the week, US retail sales for December missed the forecasted change of -0.8% (MoM) with a change of -1.1%. The retail sales control group also came short of -0.2% with a change of -0.7%.

USD/CAD Technical Analysis (the 60-min Chart)

Technically, the USD/CAD currency pair appears to have recently completed a downward breakout from a descending channel formation. This indicates a rapid increase in the short-term bearish bias.

Therefore, the bears will be looking to extend the current streak of declines toward 1.3350 or lower to 1.3322. On the other hand, the bulls will look to pounce on profits at about 1.3408 or higher at 1.3436.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair seems to be trading within a descending channel formation. This indicates a significant long-term bearish bias in the market sentiment.

Therefore, the bears will be targeting long-term profits at about 1.3230 or lower at 1.3066. On the other hand, the bulls will look to pounce on rebounds at about 1.3508 or higher at 1.3666.